"System emulators come in two basic flavors, machine architecture emulators and operating system emulators. Wine is a complete package that emulates the Windows operating system. Windows itself is not required. Wine includes its own versions of the Windows system DLLs, but you can use the native Windows versions if you prefer. Depending on the intended use, the system may require other native support software expected by your applications. "

Or visit the wine section at forums.emulator-zone.com.

You would be able to find other articles disagreeing but ALL they tend to do is repeat the mantra that "WIne is Not an Emulator". Whereas the ORIGINAL naming was indeed

WINdows Emulator.

Which makes a lot more sense if anyone were to think about how it would be named at the start of the project.

People are of course welcome to their own opinions on the matter. And there are plenty of links to people who think "emulation" is (for whatever reason) limited to x86 opcode substitutions.

To call the WINE win api layer a "compatability layer" is misleading since its more than a layer : its a rebuild, or emulation, of the Windows codebase based on the documented functionalities of the functions therein.